YAHUD, Israel, November 17, 2010 /PRNewswire-FirstCall/ -- Magal S3 Ltd. (NASDAQ GMS: MAGS, TASE: MAGS) today announced its consolidated financial results for the three and nine month periods ended September 30, 2010.
Results For The Three Month Period Ended September 30, 2010
Revenues for the third quarter of 2010 totaled $13.4 million. This represents a decrease of 24.4% over third quarter 2009 revenues of $17.7 million, and an increase of 16.9% compared with $11.4 million in revenues reported in the second quarter of 2010.
Gross profit for the third quarter of 2010 totaled $4.5 million, or 34.0% of revenues. This is compared with gross profit of $6.4 million, or 36.3% of revenues, in the third quarter of 2009, and represents an improvement over gross profit of $3.6 million, or 31.7% of revenues, in the second quarter of 2010.
Operating loss for the third quarter of 2010 was $0.8 million. This is compared with operating income of $0.5 million in the third quarter of 2009 and an operating loss of $1.7 million reported in the second quarter of 2010.
Net loss for the third quarter of 2010 was $0.8 million. This is compared with a net loss of $0.7 million in the third quarter of 2009 and a net loss of $1.5 million in the second quarter of 2010.
Net loss per share for the third quarter of 2010 was $(0.08), compared with a net loss per share of $(0.07) in the third quarter of 2009 and a net loss per share of $(0.15) in the in the second quarter of 2010.
Cash and cash equivalents and restricted cash amounted to $17.8 million as of September 30, 2010 compared with $13.7 million as at December 31, 2009. During the quarter the Company received a bridge loan of $10 million from Magal's principal shareholder.
Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal, said, "We are pleased with the sequential improvement in our third quarter results, demonstrating that we are on the right track. Following a period of rationalizing costs and the integration of our US operations into our Canadian subsidiary last year, we are running a leaner and more efficient operation, and we aim to return to profitability in the near future. We ended the quarter with a strong level of cash, supported by the $10 million bridge loan granted to us by the Company's major shareholder. This loan provides us with sufficient working capital to implement our new business strategy for long-term profitable growth."
"Following a difficult period caused by the global economic crisis, we are beginning to see improvements in a number of the regions in which we operate, particularly in the emerging market regions. We are now competing in a number of tenders globally and our pipeline of potential deals has grown strongly over the past year. We believe that our advanced security sensors, together with our in-the-field proven capabilities will allow us to convert a good portion of our pipeline into revenues. Now, more than ever, I believe Magal has turned the corner and I am increasingly enthusiastic about Magal's future," concluded Mr. Livneh.
Investors' Conference Call Information:
The Company will host a conference call tomorrow, on November 18, 2010, at 9:00am Eastern Time.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
US: 1-888-407-2553 Israel: 03-918-0644 UK: 0-800-917-9141 International: +972-3-918-0644
A replay of the call will be available from the day after the call. The link to the replay will be accessible from Magal's website at: http://www.magal-s3.com.
About Magal S3
Magal S3 is a leading international solution provider, in the business of Security, Safety and Site Management. Based on 35 years of experience and interaction with customers, the company has developed a unique set of solutions and products, optimized for perimeter, outdoor and general security applications. Magal S3's turnkey solutions are typically integrated and managed by a single sophisticated modular command and control software, supported by expert systems for real-time decision support. Magal S3's broad portfolio of critical infrastructure and site protection management technologies includes a variety of smart barriers and fences, fence mounted detectors, virtual gates, buried and concealed detection systems as well as a sophisticated protection package for sub-surface intrusion. A world innovator in the development of CCTV, IVA and motion detection technology for outdoor operation, Magal S3 has successfully installed customized solutions and products in more than 75 countries worldwide.
Safe Harbor Statement With Regard to Forward Looking Information
This press release contains forward-looking statements, which are subject to risks and uncertainties. Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements. A number of these risks and other factors that might cause differences, some of which could be material, along with additional discussion of forward-looking statements, are set forth in the Company's Annual Report on Form 20-F filed with the Securities and Exchange Commission.
In September 2009, Magal's Board of Directors resolved to discontinue the operations of the European integration subsidiary, acquired in September 2007. The results for the quarter and the nine months ended September 30, 2009 were reclassified to disclose the results of that subsidiary as discontinued operations. The net assets of the subsidiary for the nine months ended September 30, 2009 were reclassified accordingly.
** Financial Tables to Follow ** MAGAL S3 LTD. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (All numbers except EPS expressed in thousands of US$) Nine Months Ended Three months Sept. 30, Ended Sept. 30, 2010 2009 % 2010 2009 % change change Revenue $34,565 $39,552 (12.6) $13,362 $17,682 (24.4) Cost of revenue 22,736 24,678 (7.9) 8,820 11,266 (21.7) Gross profit 11,829 14,874 (20.5) 4,542 6,416 (29.2) Operating expenses: Research and 3,064 3,551 (13.7) 910 1,246 (27.0) development, net Selling and 6,982 7,064 (1.2) 2,438 2,589 (5.8) marketing General and 5,881 6,093 (3.5) 2,006 2,108 (4.8) administrative Total operating 15,927 16,708 (4.7) 5,354 5,943 (9.9) expenses Operating (4,098) (1,834) (812) 473 income (loss) Financial 562 1,065 (47.3) (97) 839 expense (income), net Loss from continuing operations (4,660) (2,899) (715) (366) before income taxes Income tax 46 (149) 66 195 (66.2) (benefit) Net loss from (4,706) (2,750) (781) (561) continuing operations Loss on - (97) - (160) discontinued operations, net Net loss (4,706) (2,847) (781) (721) Less: net income (loss) attributable to (19) - (18) - non-controlling interest Loss (4,725) (2,847) (799) (721) attributable to Magal shareholders Basic and diluted loss per share from $(0.45) $(0.26) $(0.08) $(0.05) continuing operations Basic and diluted loss per share from $-- $(0.01) $- $(0.02) discontinued operations, net Basic and $(0.45) $(0.27) $(0.08) $(0.07) diluted net loss per share Nine Months Ended Sep. Three months Ended 30, Sep. 30, 2010 2009 2010 2009 % % % % Gross margin 34.2 37.6 34.0 36.3 Research and development, net as a % of 8.9 9.0 6.8 7.0 revenues Selling and 20.2 17.9 18.2 14.6 marketing as a % of revenues General and 17.0 15.4 15.0 11.9 administrative as a % of revenues Operating (11.9) (4.6) (6.1) (2.7) margin Net margin (7.0) (7.0) (6.0) (3.2) before discontinued operation Loss on discontinued operation as a (0.0) (0.2) (0.0) (0.9) % of revenues Net margin (13.7) (7.2) (6.0) (4.1) after discontinued operation MAGAL S3 LTD. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All numbers expressed in thousands of US$) Sept. 30, December 31, 2010 2009 CURRENT ASSETS: Cash and cash equivalents $ 14,841 $ 11,869 Short term bank deposits - 1,807 Restricted deposit 2,963 - Trade receivables 15,487 12,328 Unbilled accounts receivable 1,904 5,892 Other accounts receivable and prepaid expenses 3,390 1,573 Deferred income taxes 388 272 Inventories 10,448 10,912 Total current assets 49,421 44,653 Long term investments and receivables: Long-term trade receivables 1,560 1,753 Long-term loans - 200 Long-term bank deposits 50 40 Severance pay fund 2,071 2,476 Total long-term investments and receivables 3,681 4,469 PROPERTY AND EQUIPMENT, NET 8,882 9,178 OTHER INTANGIABLE ASSETS, NET 278 269 GOODWILL 2,013 2,053 ASSETS ATTRIBUTED TO DISCONTINUED OPERATION - 28 Total assets $64,275 $60,650 CURRENT LIABILITIES: Short-term bank credit $8,308 $ 8,234 Current maturities of long-term bank debt 662 1,824 Trade payables 3,305 4,018 Other accounts payable, accrued expenses and 10,139 10,110 customer advances Total current liabilities 22,414 24,186 LONG-TERM LIABILITIES: Long-term bank debt 54 548 Major Share holder loan 9,745 - Accrued severance pay 3,187 3,562 Total long-term liabilities 12,986 4,110 LIABILITIES ATTRIBUTED TO DISCONTINUED - 45 OPERATION SHAREHOLDERS' EQUITY 28,875 32,309 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $64,275 $60,650 Total bank debt to total 0.31 0.33 capitalization Current ratio 2.20 1.85 For more information: Magal S3 Ltd. Eitan Livneh, CEO Tel: +972-3-539-1421 Assistant: Ms. Elisheva Almog E-mail: elishevaA@magal-s3.com Web: http://www.magal-s3.com CCG Investor Relations Ehud Helft/Kenny Green Tel: (US) +1-646-201-9246 Int'l dial: +972-3-607-4717 E-mail: firstname.lastname@example.org
SOURCE Magal Security Systems Ltd